Luxury goods boom in Britain as super-rich youngsters buck the recession

Rich kids of Insta use strong dollar to fuel sales of brands such as Burberry, Louis Vuitton and Gucci

They’re young, rich and mortgage-free, and the scions of the 1% are having a roaring twenties.

Despite the economic gloom currently shrouding the UK and many other western countries, sales of luxury brands have been booming and growing numbers of buyers are young adults.

Swiss watches, Louis Vuitton trainers, rare Birkin bags and 81-year-old whiskies are among the products that are fuelling impressive growth in the bottom lines of luxury brands such as LVMH, Burberry and Kering.

Imports of Swiss watches to the UK were up by 31% in the first half of 2022, according to the Federation of the Swiss Watch Industry – the average spend at the Watches of Switzerland group being about £6,000. Meanwhile, sales of watches below £2,500, sometimes referred to as “mid-range”, are falling.

A Rolex watch
Watches feature prominently in the luxury resale market. Photograph: /Alamy

Burberry’s sales were up 11% over the last six months, it was reported last week. LVMH, which owns brands including Dior, Tiffany, Moët Hennessy and Louis Vuitton, was up by 28%, while Kering, the firm behind Gucci and Balenciaga and others, saw a 14% rise.

“I don’t want to describe luxury as recession proof – it feels like tempting fate – but it is an extremely resilient sector, both at the top end of the market and at the affordable luxury segment,” said Helen Brocklebank, chief executive of Walpole, which represents the British luxury market.

Tourists from the US and the Middle East are making use of the strong dollar to come to the UK and European countries, according to James Ison, the self-styled Deal Maker For The 0.1%, who founded his business as a wrangler for the rich after his Rich Kids of Instagram account became popular.

Louis Vuitton
Louis Vuitton is a popular brand for designer bags. Photograph: Christophe Petit-Tesson/EPA

“People are having a Yolo [you only live once] moment,” Ison said. “They’re going to Bicester Village and spending five figures in an afternoon. They include a lot of people who did well in the pandemic, online entrepreneurs.

“These are people who aren’t necessarily paying a mortgage or high fuel costs,” Ison said. “Kids of very successful business people, or international students. They’re the younger generation who are more likely to bid on Louis Vuitton and Nike Air Force 1 trainers at £7,000 a pair.”

This is the other side of the boom – the rise of the luxury reseller. Buying a watch, a handbag or a pair of trainers has become a new type of investment, although nobody refers to these resold investments as “second hand”.

“During the pandemic, people were selling their Rolexes for 150%, 180% more than the retail cost,” Ison said. “They just don’t have the supply – the big luxury brands are facing the same kind of issues as every other business with supply chains, so you’re getting people who are able to find something at retail, and then sell it online 24 hours later for double.”

Sotheby’s and other traditional auction houses have set the tone with sales of items such as a Hermès Himalaya Birkin 30 handbag for $226,180 (£190,250) in 2021.

More modest offerings are available online at sites such as Vestiaire Collective, Trendy Tickers and the RealReal, which said that millennials and Gen-Z shoppers made up 41% of their customers.

“People are more incentivised to buy a watch than save up and buy a house,” Ison said. “It gives them opportunities – they’re buying status, that way to level up into whatever crowd they’re chasing. And a watch is easier to sell than a house.”

Whiskies are the British equivalent of Swiss watches, according to Brocklebank. Last month an anonymous collector at Sotheby’s in London paid £300,000 for a bottle of Macallan’s The Reach, an 81-year-old single malt, the oldest whisky to be sold at auction.

However, luxury goods makers in Britain are concerned that dollar-rich tourists are not returning to London, but are preferring European destinations such as Paris and Milan because the UK has stopped allowing tourists to reclaim VAT when they leave the country.

“I go day-to-day to boutiques and department stores, and it’s quiet,” said Melody Mashilompane, the founder of Style Concierge by Melody, who is a personal shopper for many high-net worth individuals.

“People definitely aren’t spending as much as they were six months ago,” she said.


James Tapper and Alice Fisher

The GuardianTramp

Related Content

Article image
Recession bypasses market for luxury goods
Mintel, said the Asia Pacific region has overtaken Europe to become the largest market for luxury goods companies

Rupert Neate

15, Feb, 2013 @8:04 PM

Article image
Battle for succession in house of Dior: siblings jostle to seize family crown
The world’s richest man, Bernard Arnault, is choosing which of his children will lead his $418bn conglomorate. Cue gold-plated intrigue and drama …

Edward Helmore

14, Jan, 2023 @12:00 PM

Article image
Hermès promises improvement to goods after slow sales
French luxury brand blames distribution issues and depressed customer spending for slowest sales growth in recent years

Simon Neville

22, Apr, 2013 @7:03 PM

Article image
What to buy the super-rich this Christmas? A luxury experience, of course
Retailers’ bids to woo wealthy include private dinner inside Jimmy Choo’s or Antarctica trip

Rupert Neate Wealth correspondent

21, Dec, 2018 @3:00 PM

Article image
Reassuringly expensive: top fashion labels bid to lure elite back
As their super-rich clients get wealthier still, haute couture brands cash in by offering increasingly rarefied fashion

Edward Helmore

11, Jul, 2021 @7:45 AM

Article image
£63m for a five-bed London home? It’s a snip as the super-rich cash in
Prime property prices in London are falling. But at the very top of the market, sales are booming as billionaires hunt for bargains

Rupert Neate Wealth correspondent

04, Aug, 2018 @11:59 AM

Article image
Time to try out some luxury PPE, now that Covid face masks are so last spring
Fashion brands and style influencers are touting gold-studded face shields or even full Perspex head coverings

Priya Elan

20, Sep, 2020 @5:50 AM

Article image
Luxury goods giant LVMH makes $14.5bn Tiffany & Co approach
French conglomerate has held preliminary takeover discussions with US jeweller

Rupert Neate Wealth correspondent and Julia Kollewe

28, Oct, 2019 @8:18 AM

Article image
£220,000: the price super-rich will pay to keep their privacy
Call for greater transparency as wealthy foreigners fork out to avoid registering London properties

Rupert Neate

05, Mar, 2017 @12:04 AM

Article image
Super-rich sabbatical: the boom in luxury long breaks for the 1%
From shark swims to snow leopard treks, a tailored trip of up to a year is now a must-have

Rupert Neate Wealth correspondent

06, Jan, 2019 @12:32 PM